Presented and described the -1 amendment and elimination of the
rolling reconnect to federal law changes pertaining to taxable income.Establishes a date certain for all federal
tax changes, (Exhibit 1).

The amendment does not have a revenue impact because there were no
law changes effective December 31, 2002, that changes taxable income,
(Exhibit 2).There is a minimal
fiscal impact, (Exhibit 3).

Discussion regarding the rolling reconnect and the preliminary nature
of the proposed plan.

127

140

171

Martin-Mahar

Martin-Mahar

Discussed “Federation of Tax administrator’s bulletin”, (Exhibit 5),
a tool used in the development of a preliminary revenue impact.

Provided survey “Table 3. State Relationships to the Federal Tax Code
Starting Points and Automatic or Date-Certain Conformity”, (Exhibit 6), as
frame of reference for where Oregon in relationship to other states.

Would it be your intent to have different legislation after this to
disconnect from some provisions passed by the federal government?

194

Chair Shetterly

My intent would not be to disconnect from anything in current law,
but to make this disconnect as we go forward.This session probably would not deal with elements of the
federal plan.This bill would lock
Oregon into December 31, 2002.Committee members may want to have bills later that address elements
of connection points to federal law.

200

Hass

Does -1 amendment disconnect?

205

Chair Shetterly

Answered affirmatively.

207

Lizbeth

The -1 amendment disconnects you from future changes.Next session, if the Bush plan passed, decisions
will be made whether to disconnect with each component of the plan.

220

Hass

Next session it would require simple majority to vote on the
components?

This does not address the estate tax issue at all.That would be a different bill, we do not
automatically connect with federal law changes pertaining to estate taxes.

Questions and discussion regarding estate taxation.

266

Debra Buchanan

Spoke to the administrative aspect of -1 amendment, does increase workload
for the Revenue Department, but won’t be asking for money or more positions.

280

Joe Schweinhart

Would not like to see disconnection from potential economic
incentives, but understands situation the legislature is in.

295

Rob Douglas

This changes things, but would go back to the prior commitment and
describe changes in federal tax code through hearings process to help make
future policy choices.

320

Discussion regarding uncertainty of federal tax law changes and
affect on Oregon revenues.

310

Chair

No intent to move amendment today, purpose to introduce and invite
discussion.

345

Berger

Is there indication of timing on federal issues?

350

Lizbeth

Discussed with Joint Committee on Taxation, timing uncertain.

355

Scott

Regarding estimates, how do they come to these numbers which may or
not be factual?Are there scenarios
of reduction from where the federal government is?

368

Martin-Mahar

Dynamic analysis done through OTIM on bonus depreciation andfeedback affects.Have not done analysis with this proposal.
When estimates are firmer, will be able to look at capturing some of the
feedback affects.

383

Discussion regarding affects of tax law changes on state of Oregon.

407

425

Paul Warner

Important to keep in mind, the forecast is done through a national
forecast service which evaluates how tax policy, approved by Congress, will
affect the national economy.Oregon will
pick it up through forecast process.OTIM tells what kinds of changes would change Oregon’s relative
position.

Questions and discussion regarding disconnection and Oregon’s
position relative to other states and nature of biennial sessions.

TAPE 49, SIDE A

033

Questions and discussion regarding economic stimulus and affects on
national and state economies.

075

Warner

Discussed history of federal disconnect and reconnect situations in
1980s, and 1990s.

Questions and discussion interspersed.

114

Chair

Federal government can stimulate economy using deficit spending, and
state cannot.

Discussion on length of time required for economic stimulus to take
effect.

135

Warner

Even under date specific policy in -1 amendment, Oregon will still be
affected by federal policy. Changes
in tax rates have a significant impact, federal investment tax credits help
economic growth without reducing tax base.In the 1990s federal decision to reduce capital gains increased Oregon
general fund revenue by over $100 million.

153

Barnhart

A fixed date in the -1 amendment makes sense, it reduces the
complexity in the Oregon’s forecasting.

172

Chair

If Federal government doesn’t take action before sine die, the
forecast which is based on current law, wouldn’t be included in these revenue
impacts?

179

Warner

Explained national forecast process and links between Oregon and
national tax policy.

208

Chair Shetterly

Would be curious to know group of states in the group with Oregon
(Exhibit 6), are they in session, and what action is pending or are they
taking.